Get on the GSA Schedule
Many people in government, including lawyers, don’t understand how business is done. As a result, they occasionally apply rules that are onerous to manufacturers. Now is such a time, and that should bode well for B-to-B catalogers selling via open market (no contracts).
To stay on the General Services Administration’s (GSA) schedule — which is a very popular and highly used government contracting vehicle representing more than 12,000 vendors and more than 10 million SKUs — manufacturers are required to give the GSA all pricing data so the government can determine what a “fair and reasonable” price for government buyers is.
The government, however, doesn’t take into consideration how much it costs to market and sell to a particular market when determining this “fair and reasonable price.” Further, it wants any and all discounts offered to any buyers anywhere to be applied to your discounts to government buyers, regardless of how much they purchase.
The result so far has been three major firms giving up their GSA schedules: Sun Microsystems, EMC and Canon. But this is good news for catalogers. Why? First, these won’t be the only manufacturers to vacate GSA. As GSA demands more information from more manufacturers, others will migrate away from GSA schedules. This will open a door for catalogers selling these products successfully to the government via the open market.
Say you sell Canon products open market right now and you have some government business. This is a great time to contact your Canon rep and emphasize your willingness and ability to target government business for Canon. This should lead Canon to send more marketing funding your way to go after those open-market government customers.
Government regulations are imposed in a pendulum-like way, and we saw a similar situation in 1994. The regulations likely will change back in a couple years to favor manufacturers. But you can build a significant relationship with both the buyers and manufacturers until GSA figures out that it’s shooting itself in the foot!